UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

                 For the quarterly period ended March 31, 2004

[_]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

          For the transition period from _____________ to ____________

                        Commission file number 333-83152


                                   Inyx, Inc.
        (Exact name of small business issuer as specified in its charter)

           Nevada                                           75-2870720
(State or other jurisdiction of                 (IRSEmployer Identification No.)
 incorporation or organization)

                825 Third Avenue, 40th Floor, New York, New York
                    (Address of principal executive offices)

                                 (212) 838-1111
                          (Issuer's telephone number)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days:
Yes [X] No [ ].

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  l2,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of May 19, 2004: 28,790,000 shares of common stock.

Transitional Small Business Disclosure Format (Check one):  Yes [ ] No [X]

Include whether Registrant is an accelerated filer:    Yes [ ] No [X]



<PAGE>

                         PART I-- FINANCIAL INFORMATION
                          Item 1. Financial Statements


































<PAGE>


                                   INYX, INC.
                 Consolidated Balance Sheet as of March 31, 2004
                                   (Unaudited)
                    (Expressed in thousands of U.S. dollars)



                                     Assets

Current assets:
      Cash                                                          $       753
      Accounts receivable, net                                            3,290
      Inventory, net                                                        915
      Prepaid expenses and other current assets                           2,397
                                                                    -----------
           Total current assets                                           7,355
                                                                    -----------

Property, plant and equipment, net                                        5,089
Deferred financing costs, net and other assets                            1,282
Deferred tax asset                                                        1,687
                                                                    -----------

           Total assets                                             $    15,413
                                                                    ===========

                      Liabilities and Stockholders' Deficit

Current liabilities:
      Borrowings under revolving line of credit                     $     6,339
      Accounts payable                                                    1,724
      Accrued expenses and other current liabilities                      1,394
      Current portion of long-term debt                                   1,483
                                                                    -----------
           Total current liabilities                                     10,940
                                                                    -----------
Long term debt, net of current portion                                    7,405
                                                                    -----------
           Total liabilities                                             18,345
                                                                    -----------
Stockholders' deficit:
      Preferred stock - $0.001 par value, 10,000,000 shares
      authorized -0- shares issued and outstanding                         --
      Common stock - $0.001 par value, 150,000,000 shares
      authorized, 28,790,000 shares issued
      and outstanding                                                        29
      Additional paid-in capital                                         12,309
      Accumulated deficit                                               (14,617)
      Subscriptions receivable                                             (393)
      Accumulated other comprehensive loss -
         foreign currency translation adjustment                           (260)
                                                                    -----------
           Total stockholders' deficit                                   (2,932)
                                                                    -----------

           Total liabilities and stockholders' deficit              $    15,413
                                                                    ===========






The  accompanying  notes are an integral  part of these  consolidated  financial
statements

                                       3
<PAGE>

                                   INYX, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)
       (Expressed in thousands of U.S. dollars, except per share amounts)


                                                   Three Months Ended March 31,
                                                       2004            2003
                                                   ----------------------------

Net revenues                                       $      4,526    $      2,730
Cost of sales                                             3,911           2,269
Rsearch and development                                     287            --
                                                   ----------------------------
           Gross profit                                     328             461

Expenses:
      General and administrative expenses                 2,104             568
      Selling expenses                                       84              51
      Depreciation and amortization                         234             228
                                                   ----------------------------

                 Total operating expenses                 2,422             847
                                                   ----------------------------

Loss from operations before
      other expenses                                     (2,094)           (386)
                                                   ----------------------------

Other expenses:
      Interest expense                                      220             176
      Reorganization and administration costs              --                55
                                                   ----------------------------
                                                            220             231

Loss before income tax                                   (2,314)           (617)
                                                   ----------------------------

Income tax benefit                                          393            --
                                                   ----------------------------


Net loss                                           $     (1,921)   $       (617)
                                                   ============================

Loss per share of common stock
      outstanding-basic and fully diluted          $      (0.07)   $      (0.04)
                                                   ============================

Weighted-average number of shares
  outstanding - basic and fully diluted              28,747,582      16,000,000
                                                   ============================







The  accompanying  notes are an integral  part of these  consolidated  financial
statements


                                       4
<PAGE>
<TABLE>
<CAPTION>

                                   INYX, INC.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                    (Expressed in thousands of U.S. dollars)



                                                                            Three Months Ended March 31,
                                                                                2004            2003
                                                                            ----------------------------
<S>                                                                         <C>             <C>
Cash flows from operating activities:
      Net loss for the period                                               $     (1,921)   $       (617)
      Adjustments to reconcile net loss to net cash
        used in operating activities:
          Depreciation                                                               152             228
          Amortization of financing costs                                             82
          Deferred tax asset                                                        (393)           --
          Reserve for inventory obsolescence                                         386            --
          Provision for bad debt                                                      59            --
          Stock option compensation                                                   66            --
          Warrants issued for financing  fees                                        369
          Issuance of shares for exercise of stock options                           290            --
          Subscription receivable                                                   (293)           --
      Changes in assets and liabilities
          (Increase) decrease in accounts receivables                                 99            (223)
          (Increase) decrease in inventory                                          (212)           (121)
          (Increase) decrease in prepaid and other current assets                 (1,344)            267
          Increase (decrease) in accounts payable and accrued liabilities            135             741
          Increase (decrease) in deferred revenue                                   (191)           --
          Increase (decrease) in working line of credit                             --              (522)
          Increase (decrease) in liabilities subject to compromise                  --               208
          Increase in deferred financing costs                                      (476)           --
                                                                            ----------------------------

                  Net cash used in operating activities                           (3,192)            (39)
                                                                            ----------------------------

Cash flows from investing activities:
      Purchase of fixed assets                                                       (58)            (28)
                                                                            ----------------------------

                  Net cash  used in investing activities                             (58)            (28)
                                                                            ----------------------------

Cash flows from financing activities:
      Borrowings under revolving line of credit                                    3,206            --
      Proceeds from issuance of long term debt                                      --               104
      Repayment of capital lease obligation                                          (34)           --
                                                                            ----------------------------

                  Net cash provided by financing activities                        3,172             104
                                                                            ----------------------------

Effect of foreign exchange rate changes
      on cash and cash equivalents                                                    35             (37)

Decreases in cash                                                                    (43)           --

Cash at beginning of period                                                          796            --
                                                                            ----------------------------

Cash at end of period                                                       $        753    $       --
                                                                            ============================
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements


                                       5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              (Dollar amounts in tables are expressed in thousands)

NOTE 1:  BUSINESS DESCRIPTION AND PRESENTATION
------   -------------------------------------

         Inyx,  Inc.   ("Inyx"  or  the  "Company")   through  its  wholly-owned
subsidiaries,  Inyx  Pharma  Limited  and  Inyx  Canada  Inc.,  is  a  specialty
pharmaceutical  company which focuses on the  development and  manufacturing  of
prescription and over-the-counter  ("OTC") aerosol  pharmaceutical  products and
drug  delivery   technologies   for  the  treatment  of  respiratory,   allergy,
dermatological and topical conditions.  Inyx's client base primarily consists of
large  ethical  pharmaceutical  corporations,   branded  generic  pharmaceutical
distributors, and biotechnology companies.

         Inyx was incorporated on March 28, 2000, in the State of Nevada,  under
the name Doblique,  Inc.  ("Doblique").  As Doblique, the Company was engaged in
the business of breeding and racing  thoroughbred  horses at various major horse
racing venues throughout the United States. On March 6, 2003, management decided
to discontinue the Company's  thoroughbred horse operation by selling the assets
of that operation to a third party.  Concurrent with the  discontinuance  of its
horse racing operations, Doblique concluded a reverse acquisition of Inyx Pharma
Limited  ("Inyx  Pharma"),  an  aerosol  pharmaceutical   manufacturing  company
incorporated  under the laws of England and Wales, and changed its name to Inyx,
Inc. ("Inyx").

         The  acquisition  of Inyx Pharma was  consummated on April 28, 2003, by
exchanging  16  million  shares  of the  Company's  restricted  common  stock in
exchange for 100% of the outstanding common stock of Inyx Pharma. As a result of
the  exchange,   the   stockholders   of  Inyx  Pharma  became  the  controlling
stockholders of the Company. In the aggregate they hold approximately 64% of the
Company's  outstanding  shares.  The  acquisition  has been  accounted  for as a
capital  transaction  under the reverse  acquisition  method of  accounting  for
business combinations.  Under this method, Inyx Pharma (the legal subsidiary) is
considered to have acquired Inyx,  Inc. (the legal parent)  effective  April 28,
2003 and continued as Inyx, Inc. thereafter.  The net assets of Inyx Pharma were
recorded at carrying value with no recognition of goodwill.

         On  March  7,  2003,   Inyx  Pharma   acquired   the  majority  of  the
pharmaceutical business assets of Miza Pharmaceuticals (UK) Ltd. ("Miza UK") out
of Administration, a United Kingdom form of Chapter 11 bankruptcy protection and
reorganization. As a result of the reverse acquisition method of accounting, the
consolidated  financial  statements  for the three  months  ended March 31, 2003
presented  herein as the comparative  historical  financial  statements of Inyx,
reflect  the  financial  position  and  results  of  operations  of Miza UK, the
predecessor company to Inyx Pharma.

         As the Biopharma  Division was part of Miza UK but not acquired by Inyx
Pharma on March 7, 2003, its results of operation are included in actual results
for the period but excluded for comparative  purposes in the pro forma financial
results.  The results of operations  have been  presented in this manner to show
the Miza UK  operation  with and  without  the  Biopharma  Division  in order to
compare its results of operations, as the predecessor company, to Inyx.

         Additionally,  for the  comparative  three months ended March 31, 2003,
operations  relating to the  business of the former  Doblique,  Inc.,  now Inyx,
Inc., have been  eliminated from the pro forma  statements as if the divestiture
of assets and liabilities and the  discontinuance of the thoroughbred  operation
occurred on January 1, 2003.

         Inyx manages its operations and business as one operating segment.


                                       6
<PAGE>


NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------   ------------------------------------------

a)       Unaudited Consolidated Interim Financial Statements

         The accompanying consolidated financial statements include the accounts
of Inyx and its wholly owned  subsidiaries:  Inyx Pharma  Limited,  an operating
company  formed  under the laws of  England  and Wales;  Inyx  Canada,  Inc.,  a
federally  incorporated Canadian  corporation;  and Inyx Realty, Inc., a Florida
corporation. All inter-company accounts and transactions have been eliminated in
consolidation.

         The accompanying consolidated financial statements for the three months
ended March 31, 2004 and 2003 are unaudited.

         In the opinion of  management,  the  unaudited  consolidated  financial
statements include all necessary  adjustments  (consisting of normal,  recurring
accruals)  for a  fair  presentation  of  the  financial  position,  results  of
operations and cash flow for the interim periods presented.  Interim results are
not necessarily indicative of results for a full year. Therefore, the results of
operations  for the  three  months  ended  March  31,  2004 are not  necessarily
indicative of operating results to be expected for a full year.

b)       Use of Estimates

         The consolidated  financial  statements are prepared in conformity with
accounting  principles  generally accepted in the United States of America.  The
preparation of consolidated  financial statements,  in conformity with generally
accepted  accounting  principles,  requires  management  to make  estimates  and
assumptions.  Those  estimates and  assumptions  affect the reported  amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported amounts of revenues and expenses.  Actual results could differ from
those estimates.

         Estimates and assumptions are periodically  reviewed and the effects of
any material revisions are reflected in the consolidated financial statements in
the period that they are determined to be necessary.

c)       Accounts Receivable

         Accounts  receivable  are  stated at net  realizable  value,  net of an
allowance for doubtful accounts.  Periodically,  management reviews all accounts
receivable and based on an assessment of whether they are collectible, estimates
the  portion,  if any, of the  balance  that will not be  collected  in order to
establish an allowance for doubtful  accounts.  Such  allowance was based on the
specific  identification of accounts deemed  uncollectible as of March 31, 2004.
The provision for the allowance for doubtful accounts is included in General and
Administrative   expenses,  in  the  accompanying   consolidated   statement  of
operations.

d)       Inventory

         Inventory  is  valued  using  the  first-in  and  first-out  method  of
accounting and is stated at the lower of cost or net realizable value.

e)       Property, Plant and Equipment

         Property,  plant and  equipment is stated at cost,  net of  accumulated
depreciation and  amortization,  which is provided for by charges to income over
the  estimated  useful life of the assets  using the straight  line method.  The
useful life of assets ranges from 3-10 years for  equipment,  and up to 25 years
for buildings.  Leasehold improvements and capital leases are amortized over the
life of the related lease.



                                       7
<PAGE>

         Expenditures  that extend the useful life of the respective  assets are
capitalized   and  depreciated   over  the  lives  of  the  respective   assets.
Maintenance, repairs and other expenses that do not extend their useful life are
expensed as incurred.

f)       Business Combinations

         The Company accounts for business  combinations in accordance with FASB
141  Business  Combinations.  Business  combinations  that  qualify  as  reverse
acquisitions  with  public  shells are  accounted  for as  capital  transactions
without the recognition of goodwill,  whereas business  combinations that do not
meet the latter criteria are accounted for under the purchase method,  and where
any excess of the  purchase  price over the  estimated  fair value of net assets
acquired is recorded as goodwill. FASB 141 requires that goodwill and intangible
assets with indefinite  useful lives no longer be amortized,  but instead tested
for impairment at least  annually by comparing  carrying value to the respective
fair  value  in  accordance  with  the  provisions  of  Statement  of  Financial
Accounting  Standards No. 142,  Goodwill and Other Intangible Assets (SFAS 142).
This  pronouncement  also requires that intangible  assets with estimable useful
lives  be  amortized  over  their  respective  estimated  useful  lives to their
estimated  residual  values,  and  reviewed  for  impairment  by  assessing  the
recoverability of the carrying value. As of January 1, 2003, the Company adopted
the provisions of SFAS 141 and SFAS 142.

g)       Deferred Financing Costs

         Costs directly  associated with obtaining financing are capitalized and
amortized on a  straight-line  basis over the  estimated  life of the  financing
arrangement.

h)       Impairment of Long Lived Assets

         The  Company  reviews  the  carrying  value of its long  lived  assets,
including intangibles, whenever events or changes in circumstances indicate that
the historical cost-carrying value of an asset may no longer be appropriate. The
Company  assesses  recoverability  of  the  carrying  value  of  the  assets  by
estimating  the  future  net cash  flows  expected  to result  from the  assets,
including eventual  disposition.  If the future net cash flows are less then the
carrying  value of the assets,  an  impairment  loss is  recorded,  equal to the
difference  between the asset's carrying value and its fair value. In performing
such reviews,  management takes into  consideration the current operating levels
including any idle capacity,  alternative uses for production  utilizing current
equipment, and growth trends and industry projections.

i)       Financial Instruments

         Financial  instruments consist of cash, accounts  receivable,  accounts
payable, accrued liabilities,  borrowings under the revolving line of credit and
loans payable.  Non-derivative  financial instruments include letters of credit,
commitments  to extend credit and  guarantees of debt.  There were no derivative
financial  instruments at March 31, 2004. The carrying values of these financial
instruments approximate their fair market value as of March 31, 2004.

j)       Revenue Recognition

         The  Company  recognizes  revenue  when (1)  persuasive  evidence of an
arrangement  exists;  (2) product  delivery has  occurred or services  have been
rendered;  (3) the fee is  fixed  or  determinable;  and (4)  collectability  is
reasonably  assured.  Revenues are recognized FOB shipping point,  when products
are shipped,  which is when legal title and risk of loss is  transferred  to the
Company's customers, and is recorded at the net invoiced value of goods supplied
to customers  after  deduction of sales discounts and sales and value added tax,
where applicable. In situations where the Company receives payment in advance of
the performance of research and development services,  such amounts are deferred
and recognized as revenue as the related  services are performed.  For the three
months  ended March 31,  2004,  deferred  revenues  amounting  to  $160,000  are
included in Accrued Expenses and Other Liabilities.



                                       8
<PAGE>

         Non-refundable  fees are  recognized  as  revenue  over the term of the
arrangement,  based on the percentage of costs incurred to date, estimated costs
to  complete  and total  expected  contract  revenue.  Product  returns  are not
accepted.

         Shipping  costs are paid by the Company's  customers.  Any shipping and
handling  costs  incurred by the company are  included in costs of goods sold in
the accompanying consolidated statements of operations.

k)       Loss per Share

         The Company follows the guidelines of Statement of Financial Accounting
Standards  No. 128,  Earnings Per Share (SFAS 128) in  calculating  its loss per
share.  Basic loss per share  ("LPS") is  computed  using the  weighted  average
number of common shares outstanding  during the period.  Diluted LPS is computed
using the weighted  average  number of common and  potentially  dilutive  common
shares outstanding during the period. Potentially dilutive common shares consist
of common stock that is issuable upon the exercise of stock options and warrants
using the  treasury  stock  method.  No  adjustments  to earnings  were made for
purposes of per share calculations.  The Company has reported a net loss for the
three months ended March 31, 2004. As a result,  4,475,000 and 5,980,000  shares
of common stock, which may be issued upon exercise of stock options and warrants
respectively, have been excluded from the calculation of diluted loss per share,
for the three months  ended March 31, 2004,  because  their  inclusion  would be
anti-dilutive.  There  were no options or  warrants  granted in the  comparative
period in 2003.

l)       Stock Based Compensation

         On May 1, 2003,  the Company  adopted a Stock Option Plan that provides
for the granting of incentive  stock options and non qualified stock options for
the benefit of employees, officers,  consultants,  directors and persons who the
Company believes may have made a valuable contribution to the Company. The total
number of shares that may be issued  under the plan  amounts to  5,000,000.  The
exercise  price per share must be at least equal to the fair market price at the
time of grant.  There were no stock option  grants during the three months ended
March 31, 2004. With the exercise of 325,000 stock options during the period, as
of March 31, 2004, there were 4,475,000 stock options  outstanding at a weighted
average  exercise price of $1.12 per share.  As of March 31, 2004, the number of
exercisable options is 2,887,000.

         The Company  applies the fair value  method of  Statement  of Financial
Accounting Standards No. 123, Accounting for Stock Based Compensation ( SFAS No.
123) in  accounting  for its stock  option  plan.  The fair value of each option
granted  was  estimated  on the date of grant  using  the  Black-Scholes  option
pricing  model.  The fair  value of all  options  granted  has been  charged  to
salaries, wages, and benefits in accordance with SFAS No. 123 .

m)       Concentration of Credit Risk

         The Company obtains detailed credit evaluations of customers  generally
without  requiring  collateral,  and  establishes  credit  limits  as  required.
Exposure to losses on receivables is  principally  dependent on each  customer's
financial  condition.  The Company  monitors its exposure for credit risk losses
and maintains an allowance for  anticipated  losses.  For the three months ended
March 31, 2004 and 2003, the Company's three largest customers accounted for 55%
and 59% of net revenues and 46% and 42% of net  receivables,  respectively.  The
loss of any of  these  customers  may  have a  material  adverse  effect  on the
operations of the Company.



                                       9
<PAGE>

n)       Income Taxes

         The Company has adopted Statement of Financial Accounting Standards No.
109,  Accounting for Income Taxes (SFAS No. 109). This standard requires the use
of an asset and  liability  approach for financial  accounting  and reporting on
income taxes.  If it is more likely than not that some portion of a deferred tax
asset will not be realized, a valuation allowance is recognized.

o)       Translation of Foreign Currency

         The functional  currency of the Company's United Kingdom  subsidiary is
the Great Britain  Pound.  The Company's  financial  statements  are reported in
United  States  Dollars (the "Dollar" ) and are  translated  in accordance  with
Statement of Financial Accounting Standards No. 52, Foreign Currency Translation
(SFAS No. 52), which requires that foreign  currency  assets and  liabilities be
translated using the exchange rates in effect at the balance sheet date. Results
of operations are translated using the average exchange rates prevailing  during
the period.  For purposes of SFAS No. 52, the Company considers the Dollar to be
the reporting  currency.  The effects of  unrealized  exchange  fluctuations  on
translating foreign currency assets and liabilities into Dollars are accumulated
as a cumulative translation adjustment which is included as a separate component
in  stockholders'  deficit.  Realized  gains and losses  from  foreign  currency
transactions are included in the results of operation for the period.



NOTE 3:  ACCOUNTS RECEIVABLE, NET
------   ------------------------

         Accounts receivable consists of the following:

                                                                      March 31,
                                                                        2004
                                                                      ---------
            Trade receivables                                         $   3,540
            Less allowance for doubtful accounts                           (250)
                                                                      ---------
                                                                      $   3,290
                                                                      =========

         There were no write-offs during the three months ended March 31, 2004.



NOTE 4:  INVENTORY, NET
------   --------------

         Inventory is comprised of the following:

                                                                      March 31,
                                                                        2004
                                                                      ---------
                                                                      $      33
         Finished goods
         Work in process                                                    251
         Raw materials                                                    1,224
                                                                      ---------
                                                                          1,508
         Less provision for obsolescence                                   (593)
                                                                      ---------
                                                                      $     915
                                                                      =========



                                       10
<PAGE>


NOTE 5:  PREPAID EXPENSES AND OTHER CURRENT ASSETS
------   -----------------------------------------

         Prepaid expenses and other current assets consist of the following:

                                                                       March 31,
                                                                         2004
                                                                       ---------
         Prepaid refundable deposit for equipment                      $   1,105
         Prepaid refundable deposit for business development                 399
         Prepaid vendor invoices                                             300
         Deferred Development costs                                          200
         Prepaid refundable deposit for acquisition candidate                170
         Deferred legal and consulting fees                                   68
         Prepaid insurance                                                    35
         Sales tax receivable, net                                            18
         Other prepaid expenses                                              102
                                                                       ---------
                                                                       $   2,397
                                                                       =========


         (a)  The  Company's   subsidiaries  will  be  providing   manufacturing
technology  transition  consulting  services to a western hemisphere  developing
nation.   Consulting  services  to  be  provided  include  the  installation  of
manufacturing  facilities,  equipment,  and systems to  manufacture  CFC-free or
hydrofluoroalkane  ("HFA") aerosol based respiratory  inhalers for the treatment
of asthma and chronic obstructive respiratory disease conditions.  As the parent
company  is a U.S.  corporation  and  because  certain  involved  members of the
Company's  management team are U.S. residents,  to perform on the contract,  the
Company's subsidiaries require United States government business  authorizations
and export permits to do business in that  developing  nation.  Due to political
events or changes to U.S.  government laws, the U.S. government may not continue
to  provide  the  Company's   subsidiaries   with  the  necessary   permits  and
authorizations  they require to provide  consulting  services in that developing
country.  The failure to receive or sustain such  authorizations  or permits may
have a material  adverse  affect on any  costs,  expenses,  or prepaid  fees and
deposits that the Company and its  subsidiaries  may have incurred or will incur
in relation to this  consulting  contract,  or the  subsidiaries'  abilities  to
continue to provide their  services to that  developing  country.  Additionally,
although the Company's  subsidiaries will be paid directly by the United Nations
Development  Programme  (UNDP) through a series of progress  payments,  they are
subject to risks of doing business in a developing  country,  including  dealing
with import or export licensing requirements;  difficulties in enforcing aspects
of the  Company's  subsidiaries'  contracts  with the  UNDP  and  that  country;
difficulties  in  protecting   intellectual  property;   unexpected  changes  in
regulatory requirements; legal uncertainty regarding liability, tax, tariffs and
other trade  barriers;  foreign  exchange  controls  and other  currency  risks;
inflation;  challenges  to  credit  and  collections;  expropriation;  and local
government instability, war, riots, insurrections and other political events.

         (b) The Company has commenced the  development  of its own  proprietary
pharmaceutical   products   for   respiratory,   dermatological,   topical   and
cardiovascular drug delivery applications.  The Company has not yet obtained the
required regulatory approvals to market such products.



                                       11
<PAGE>

NOTE 6:  PROPERTY, PLANT AND EQUIPMENT, NET
------   -----------------------------------

         Property, plant and equipment consisted of the following:

                                                                 March 31, 2004
                                                                 --------------
                                                                 $          546
         Land
         Buildings                                                        1,059
         Machinery, equipment and office furniture                        3,524
         Computer hardware & software                                        77
                                                                 --------------
                                                                          5,206
         Less accumulated depreciation                                     (478)
                                                                 --------------
                                                                          4,728

         Computer hardware & software under capital lease                   382
         Less accumulated amortization                                      (21)
                                                                 --------------
                                                                            361

                                                                 --------------
                                                                 $        5,089
                                                                 ==============


         For the three  months  ended March 31, 2004 and 2003,  depreciation  of
property,   plant  and  equipment  was   approximately   $138,000  and  $228,000
respectively.  Amortization for equipment under capital leases was approximately
$14,000 for the three months ended March 31, 2004.  There was no amortization of
capital leases in the comparable period of 2003.

NOTE 7:  DEFERRED FINANCING COSTS, NET AND OTHER ASSETS
------   ----------------------------------------------

         Deferred financing costs, net and other assets are comprised of
deposits on office space of $28,000 and deferred financing costs of $1,254,000
associated with the Company's issuance of equity and convertible debt
securities. For the three months ended March 31, 2004, the amortization of
deferred financing costs approximated $82,000. There was no amortization of
deferred financing costs in the comparable period in 2003.

NOTE 8:  BORROWINGS UNDER REVOLVING LINE OF CREDIT
------   -----------------------------------------

         The  Company  has a  $6.5  million  revolving  line  of  credit  with a
financial institution,  which is renewable in December 2006. Advances under this
facility,  amounting  to  approximately  $6.3  million  at March 31,  2004,  are
collateralized by accounts  receivables based on an agreed formula and all other
assets of the  Company.  The Company has the option of paying  interest on these
borrowings in cash or by issuing common stock.  Interest on these  borrowings is
payable  monthly  at  prime  plus 3%  with a  minimum  of 7% on the  outstanding
balance.

NOTE 9:  SUBSEQUENT EVENTS
------   -----------------

         On April 14, 2004,  Inyx Realty,  Inc.,  which the Company  established
solely to operate a corporate  office lease in Miami Florida,  was acquired by a
related party for nominal  consideration.  The acquirer is family trust in which
the  Company's  Chairman/CEO  and his spouse  are  beneficiaries.  The  acquirer
unconditionally  assumed all liabilities,  thus terminating all of the Company's
obligations under that lease.

         On May 7, 2004,  the Company  entered into an Offset  Agreement  with a
customer and 6 percent  uncollateralized  convertible  note  holder.  Under this
agreement,  the  Company is allowed to apply the unpaid  interest  for the first
year of the note,  amounting to $275,000,  against  future  product  development
services provided by the Company to the note holder.

         On  May  7,  2004,  the  Company   terminated  its  investment  banking
relationship  with its present  investment  banker.  As a  termination  fee, the
Company agreed to pay $120,000,  plus eight percent  interest on the outstanding
principal over twelve months, commencing May 15, 2004.



                                       12
<PAGE>

         On May 11, 2004, the Company announced the appointment of a new outside
director to chair the Company's Audit Committee.  In  consideration  for joining
the Company's  board,  the new director was issued 200,000 Company Stock Options
at an  exercise  price  of  $1.10.  The  350,000  stock  options  issued  to the
predecessor director were cancelled,  and in exchange, the Company issued to the
resigning  director a three-year  Common  Purchase  Warrant to purchase  100,000
shares of its common stock at an exercise price of $1.20.

NOTE 10: STOCKHOLDERS' EQUITY
-------  --------------------

         On January 15,  2004,  pursuant  to an exercise of 200,000  options the
Company issued 200,000 shares of common stock at $1.10 per share issued.

         On January 16,  2004,  pursuant  to an  exercise of 65,000  options the
Company issued 65,000 shares of common stock at $1.20 per share issued.

         During the three  months  ended March 31,  2004,  the  Company  granted
495,000 warrants to a financial  institution in consideration for an increase in
its secured  revolving  line of credit with that  institution.  These  five-year
warrants  allow the holder to  purchase  the  Company's  common  stock at prices
ranging from $1.25 to $1.75 per share.

         During the three  months  ended March 31,  2004,  the Company  recorded
approximately $66,000 of additional paid-in capital resulting from stock options
which  vested  during  the  period.  This  amount is  included  in  general  and
administrative expenses in the consolidated statement of operations.

NOTE 11: ACCUMULATED COMPREHENSIVE LOSS
-------  ------------------------------

         The  accumulated  comprehensive  loss  reflected  in  the  Consolidated
Statements of Operations  represents  accumulated  foreign currency  translation
adjustments  associated  with the  conversion  of the Company's  United  Kingdom
subsidiary's  accounts to US dollars.  These amounts are not adjusted for income
taxes as they relate to an indefinite investment in a foreign subsidiary.

NOTE 12: SUPPLEMENTAL CASH FLOW INFORMATION
-------  ----------------------------------

                                                                  March 31, 2004
                                                                  --------------
Supplemental Disclosure of Cash Flow Information:

      Cash paid during the period for interest                    $           28
                                                                  ==============
Supplemental Disclosure of Non-Cash Financing Activities:

      Warrants issued for financing fees                          $          369
                                                                  ==============







                                       13
<PAGE>
<TABLE>
<CAPTION>

                    PRO FORMA FINANCIAL STATEMENT INFORMATION

         The following condensed pro forma consolidated statements of operations
are based on the assumption  that the  acquisition of Inyx Pharma Limited ("Inyx
Pharma") took place as of January 1, 2003,  and includes the  operations of Miza
Pharmaceuticals (UK) Limited ("Miza UK"), the predecessor company to Inyx Pharma
for the three  months  ended  March 31,  2003.  On March 7,  2003,  Inyx  Pharma
acquired the majority of the operating  assets of Miza UK from a court appointed
Administrator.  The  acquisition  did  not  include  the  operations  of  Miza's
Biopharma  Division  which have been  eliminated  for the  purposes of these pro
forma statements.

                                   INYX, INC.
        Unaudited Pro Forma Condensed Combining Statements of Operations
                 For the Three Month Period Ended March 31, 2003
                    (In Thousands, Except per share amounts)

                                                                               Pro Forma
                                                Inyx, Inc.     Miza UK (1)      Adj.(2)         Total
<S>                                             <C>            <C>            <C>            <C>
Net revenues                                    $      --      $     2,730    $      (334)   $     2,396
Cost of goods sold                                     --            2,269           (393)         1,876
                                                -----------    -----------                   -----------
     Gross profit                                      --              461                           520

Expenses:
    General and administrative expenses                --              568            (33)           535
    Selling expenses                                   --               51                            51
    Depreciation and amortization                      --              228            120            348
    Management fees                                    --             --                            --
                                                -----------    -----------                   -----------

          Total operating expenses                     --              847                           934
                                                -----------    -----------                   -----------

Loss from operations before other expenses             --             (386)                         (414)

Other expense:
    Administration expense                             --               55                            55
    Acquisition costs                                  --                                           --
    Warrants issued for services                       --             --                            --
    Interest expense                                   --              176            253            429
                                                -----------    -----------                   -----------
                                                       --              231                           484
Loss before income tax benefit
and discontinued operations                            --             (617)                         (898)

Income tax benefit                                     --             --                            --

Loss from discontinued operations, net of tax           (25)          --                             (25)
                                                -----------    -----------                   -----------

Net loss                                        $       (25)   $      (617)                  $      (923)
                                                ===========    ===========                   ===========
</TABLE>


(1) Results  of  predecessor  company,  Miza UK,  including  the  operations  of
    Biopharma Division which was not included in the acquisition
(2) Interest  and  depriciation  expense  are  adjusted  to reflect  the charges
    related  to pro forma  debt and net fixed  assets as of the  closing  of the
    asset acquisition. The activity relating to Biopharma Division which was not
    included in the acquisition is eliminated







                                       14
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operations

         The financial  information set forth in the following discussion should
be read in  conjunction  with,  and  qualified in its entirety by the  Company's
consolidated  financial statements and related notes appearing elsewhere in this
report.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

         Statements  that are not  historical  facts included in this report are
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995 that involve risks and  uncertainties  that could
cause actual results to differ from projected  results.  Such statements address
activities, events or developments that the Company expects, believes, projects,
intends or  anticipates  will or may  occur,  including  such  matters as future
capital, business strategies,  expansion and growth of the Company's operations,
cash flow,  marketing of products and services,  and development of new products
and  services.  Factors  that could cause  actual  results to differ  materially
("Cautionary  Disclosures")  are described  throughout  this report.  Cautionary
Disclosures include, among others: general economic conditions,  the markets for
and market price of the Company's  products and services,  the Company's ability
to find,  acquire,  market,  develop and produce new products and services,  the
strength and  financial  resources of the Company's  competitors,  the Company's
ability to find and retain skilled personnel, labor relations,  availability and
cost of material and equipment, the results of financing efforts, and regulatory
developments  and compliance.  All written and oral  forward-looking  statements
attributable  to the Company are  expressly  qualified in their  entirety by the
Cautionary Disclosures. The Company disclaims any obligation to update or revise
any  forward-looking  statement  to reflect  events or  circumstances  occurring
hereafter or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

         Inyx,  Inc.   ("Inyx"  or  the  "Company")   through  its  wholly-owned
subsidiaries,  Inyx  Pharma  Limited  and  Inyx  Canada,  Inc.,  is an  emerging
specialty  pharmaceutical company. We focus our expertise on the development and
manufacture of prescription and over-the-counter  ("OTC") aerosol pharmaceutical
products  and drug  delivery  technologies  for the  treatment  of  respiratory,
allergy,  dermatological  and  topical  conditions.  Our client  base  primarily
consists of ethical pharmaceutical corporations,  branded generic pharmaceutical
distributors,   and  biotechnology   companies.  We  depend  on  our  customers'
distribution   channels   or   strategic   partners   to  market  and  sell  the
pharmaceutical products we develop and manufacture for them.

         We  intend  to  expand  our  product   development  and   manufacturing
activities into our own lines of prescription and OTC  pharmaceutical  products,
but as of March 31,  2004,  we had not yet  commercialized  or marketed  our own
products or drug delivery applications.  Additionally, a material element of our
growth  strategy  is  to  expand  our  existing   business   through   strategic
acquisitions of pharmaceutical  products and drug delivery technologies that are
complementary with our expertise in the aerosol pharmaceutical sector.

         Our Company was incorporated  under the laws of Nevada in March 2000 as
Doblique,  Inc.  In July  2002,  we  became a  publicly-traded  company  when we
completed a registration  statement for the sale by our principal stockholder of
2,450,000  shares of common  stock.  Since  July  2002,  we have  filed  annual,
quarterly  and periodic  reports  with the  Securities  and Exchange  Commission
pursuant to Section 15(d) of the Securities Exchange Act of 1934.

         Prior to March  2003,  we were in the  business  of owning  and  racing
thoroughbred  horses at various major horse racing tracks  throughout the United
States.  In March  2003,  the assets of that  operation  were sold for cash to a
third party,  and the Company  discontinued  the business of breeding and racing



                                       15
<PAGE>

thoroughbred  race horses.  On March 26, 2003, we announced that our controlling
stockholder  had accepted an  unsolicited  offer to sell a controlling  block of
2,250,000  shares  of  common  stock,  representing  approximately  45%  of  the
Company's then issued and outstanding  shares,  to Medira  Investments,  LLC. At
that time, the Company also announced that it would pursue strategic  investment
opportunities  in a number of sectors within the  pharmaceutical,  biotechnology
and medical devices industries.

         We now  operate in one  business  segment,  contract  manufacturing  of
pharmaceutical  products.  At this time, all of our other  business  activities,
including  product   development  and  manufacturing   consulting  services  are
supporting  our  contract  manufacturing  operations.  Segment  reporting on our
business will begin to occur as we move into the additional  business activities
described elsewhere herein.

         On February 3, 2004, we announced  that our Company was selected by the
United  Nations  Development  Programme to assist a  developing  nation meet the
requirements  of  the  Montreal   Protocol  to  phase  out  the  consumption  of
ozone-depleting chorofluorocarbon ("CFC") gases in metered dose inhalers used in
the treatment of asthma and other respiratory conditions.  The Montreal Protocol
is an  international  agreement  signed by 180  countries  (both  developed  and
undeveloped)  designed to eliminate the production and consumption of substances
that deplete the stratospheric ozone layer including the reduction of the use of
CFC's  within the  pharmaceutical  industry.  With funding  assistance  for this
project provided by the United Nations Multilaterial Fund for the Implementation
of the Montreal  Protocol,  we expect to commence our initial contract providing
technology  transition  consulting  services to a candidate  country  later this
year.   These  services  will  include   assistance  with  the  installation  of
manufacturing  facilities,  equipment,  and systems to  manufacture  CFC-free or
Hydrofluoroalkane  ("HFA") aerosol based respiratory  inhalers for the treatment
of asthma and chronic obstructive respiratory disease conditions.

         We have now also  commenced  research  and  development  activities  to
develop our own  proprietary  pharmaceutical  products.  We believe  that we can
improve our revenue and profitability  opportunities through the addition of our
own  pharmaceutical  product lines which may offer greater  profit  margins than
those provided by our contract manufacturing  services. Our proprietary products
will  be  for  respiratory,  dermatological,  topical  and  cardiovascular  drug
delivery  applications.  Planned products  include metered dose inhalers,  nasal
pumps,  topical aerosols,  wound care sprays,  and oral sprays. We are primarily
focusing  our  efforts on generic  versions or  extensions  of  established  and
non-patented  products,  or those barrier delivery systems that overcome present
product and  propellant  incompatibility  and consumer use issues in the aerosol
pharmaceutical  sector.  While we do not currently  derive any revenues from the
sale of our own products,  it is anticipated that our first proprietary  product
should be ready for  commercial  marketing by the end of 2004 or early 2005.  We
plan  to  distribute  our  proprietary   products  through  our  own  customers'
distribution  channels or in collaboration  with strategic  marketing  partners,
although we do not as of yet have any  distribution  agreements for our products
finalized.

CRITICAL ACCOUNTING POLICIES

         Our  accounting  policies  are  disclosed in Note 2 to the Notes to the
Consolidated  Financial  Statements  in our Annual Report on Form 10-KSB for the
year ended December 31, 2003. We consider the following policies to be important
to our financial statements.

Revenue Recognition

         The  Company  recognizes  revenue  when (1)  persuasive  evidence of an
arrangement exists; (2) product delivery has occurred or services rendered;  (3)
the fee is fixed or  determinable;  and (4)  collection is  reasonably  assured.
Revenues are recognized FOB (Freight-on-Board) shipping point, when products are
shipped,  which  is when  legal  title  and risk of loss is  transferred  to the
Company's customers, and is recorded at the net invoiced value of goods supplied
to customers  after  deduction of sales discounts and sales and value added tax,
where applicable. In situations where the Company receives payment in advance of
the performance of research and development services,  such amounts are deferred
and recognized as revenue as the related services are performed.



                                       16
<PAGE>

         Non-refundable  fees are  recognized  as  revenue  over the term of the
arrangement,  based on the percentage of costs incurred to date, estimated costs
to  complete  and total  expected  contract  revenue.  Product  returns  are not
accepted.

         Shipping  costs are paid for by the Company's  customers.  Any shipping
and handling  costs  incurred by the company are included in costs of goods sold
in the accompanying consolidated statements of operations.

Translation of Foreign Currency

         The functional  currency of our Company's U.K.  subsidiary is the Great
Britain Pound. Our Company's financial  statements are reported in United States
Dollars and are translated in accordance with Statement of Financial  Accounting
Standards No. 52, which requires that foreign currency assets and liabilities be
translated using the exchange rates in effect at the balance sheet date. Results
of operations are translated using the average exchange rates prevailing  during
the  period.  For  purposes  of SFAS No.  52, we  consider  the dollar to be the
reporting  currency.   The  effects  of  unrealized  exchange   fluctuations  on
translating foreign currency assets and liabilities into Dollars are accumulated
as a cumulative translation adjustment in stockholders' deficit.  Realized gains
and losses from  foreign  currency  transactions  are included in the results of
operation for the period.  Fluctuations arising from inter-company  transactions
are of long  term  in  nature  and are  accumulated  as  cumulative  translation
adjustments.

         As of  March  31,  2004,  we  had  not  utilized  any  currency-hedging
programs.  However,  as we intend to  continue  to  utilize  US-based  financing
sources, and as the significant majority of our revenues are in Pounds Sterling,
we have  established a commercial  banking  relationship  with a major  US-based
financial institution that will also provide us with  currency-hedging  advisory
services  including  our  participation  in  currency-forward  contracts for the
purpose of mitigating foreign exchange losses.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 and 2003

Consolidated Results

         The  accompanying   consolidated  financial  information  includes  the
accounts of Inyx, Inc. and its wholly-owned  subsidiaries,  Inyx Pharma Limited,
incorporated  under the laws of England and Wales; Inyx Canada Inc., formed as a
federally  incorporated Canadian  corporation;  and Inyx Realty, Inc., a Florida
corporation. All inter-company accounts and transactions have been eliminated in
consolidation.

         On April 14, 2004, Inyx Realty,  Inc.,  which we established  solely to
operate a corporate office lease in Miami Florida,  was acquired by First Jemini
Trust, a discretionary family trust in which our Chairman/CEO and his spouse are
beneficiaries. As a result, as of April 14, 2004, Inyx Realty Inc. was no longer
a  subsidiary  of our  Company  and all of Inyx's  obligations  relating to Inyx
Realty, primarily an office lease in Miami, have been terminated.

         On April 28, 2003, we acquired all of the outstanding  common shares of
Inyx Pharma Ltd., an aerosol  pharmaceutical  manufacturing company incorporated
under the laws of England and Wales, in a transaction accounted for as a reverse
acquisition of our Company by Inyx Pharma. In this transaction,  we exchanged 16
million  of our  common  shares for all  outstanding  and issued  shares of Inyx
Pharma. As a result of such transaction,  the stockholders of Inyx Pharma became
our  controlling and principal  stockholders,  owning  approximately  64% of our
outstanding  stock at the time; Inyx Pharma became our wholly-owned  subsidiary;
and on May 6,  2003,  we  changed  our name to  Inyx,  Inc.  As a result  of the
accounting of this  transaction as a reverse  acquisition,  and for  comparative
purposes only, the historical  financial statements of Inyx Pharma are presented
herein as our own historical statements.



                                       17
<PAGE>

Pro Forma Results

         On March 7, 2003,  Inyx Pharma  acquired  the  majority of the business
assets of Miza  Pharmaceuticals  (UK) Limited ("Miza UK") from a court-appointed
Administrator (the U.K. equivalent of a Chapter 11 trustee).  As noted above, as
a result of the  reverse  acquisition  method  of  accounting,  the  comparative
consolidated  financial statements reflect the financial position and results of
operations of Miza UK, the predecessor  company to Inyx Pharma for the period up
to March 6,  2003,  and as a result  are  presented  herein  as the  comparative
historical financial statements of Inyx.

         Through  the  Miza  UK  purchase,  Inyx  Pharma  acquired  one  aerosol
pharmaceutical  manufacturing  site  (the  Miza  UK  Aerosols  Division)  and  a
pharmaceutical  product development operation (the Miza UK Development Division)
in England.  Prior to the sale to Inyx Pharma, Miza UK's operation also included
another pharmaceutical manufacturing operation (the Miza UK Biopharma Division).
The business assets of the Biopharma Division were excluded from the Inyx Pharma
purchase.

         As the Biopharma  business was part of Miza UK but not acquired by Inyx
Pharma on March 7, 2003,  its results of  operation  are  included in the actual
results for the period but  excluded for  comparative  purposes in the pro forma
financial results.  The results of operations have been presented in this manner
to show the Miza UK  operation  with  and  without  the  Biopharma  Division  in
comparing its results of operations,  as the predecessor company, to our results
of operations.

         For the three months ended March 31, 2003, Miza UK's Biopharma Division
had net  revenues of  approximately  $334,000  and costs of revenue of $393,000,
resulting in a gross loss of approximately  $59,000. Other than selling expenses
of $33,000, the Biopharma division had no other costs associated with it for the
three  months ended March 31, 2003,  as all such costs were  centralized  by the
Administrator.

         Additionally,  for the  comparative  three months ended March 31, 2003,
operations  relating to the  business of the former  Doblique,  Inc.,  now Inyx,
Inc., have been  eliminated from the pro forma  statements as if the divestiture
of assets and liabilities and the  discontinuance of the thoroughbred  operation
occurred on January 1, 2003.

         The  comparative  pro forma  results are  therefore  a more  indicative
comparison of our Company's business going forward.

NET REVENUES

         Total net revenues for the three months ended March 31, 2004  increased
$1.8 million or 40% to  approximately  $4.5 million as compared to approximately
$2.7 million in total net revenues for the three months ended March 31, 2003.

         In comparison, for the pro forma three months ended March 31, 2003, net
revenues were $2.4 million and the Biopharma Division's sales were approximately
$334,000.

         The  increase in net  revenues is  primarily  attributed  to three full
months of  operations  as a  pharmaceutical  company in 2004 as compared to 2003
when the predecessor company was in Administration. The increase in net revenues
is  also  as a  result  of our  efforts  to  increase  our  customer  base,  and
manufacturing  sales and associated product  development and support services to
our customers, following our reverse acquisition of Inyx Pharma.

         For the three months ended March 31, 2004, our three largest  customers
accounted for approximately $2.5 million in net revenues or approximately 55% of
total net revenues.  During the three months ended March 31, 2004, our top three
customers were the Merck Generics group of companies ("Merck Generics"), a large
international  generic drug marketing and distribution  company,  accounting for


                                       18
<PAGE>

approximately  $1.6  million in net revenues or  approximately  37% of total net
revenues;  Genpharm Inc., accounting for approximately  $458,000 in net revenues
or  approximately  10%  of  total  net  revenues;  and  SSL  International  Plc,
accounting for  approximately  $422,000 in net revenues or  approximately  9% of
total net revenues.

         In  comparison  for the three months  ended March 31,  2003,  the three
largest customers  accounted for approximately  $1.6 million or 59% of total net
revenues. These customers were Merck Generics,  accounting for $1 million in net
revenues  or  approximately  37%  of  total  revenues  for  that  period;  Adams
Healthcare,  accounting  for  $316,000 in net revenues or  approximately  12% of
total net revenues for that period; and ConvaTec  accounting for $265,000 in net
revenues or approximately  10% of total net revenues for that period.  Since our
reverse  acquisition of Inyx Pharma,  Merck Generics continues to be our largest
client.

         The  loss of any one of our top  three  customers,  particularly  Merck
Generics,  would have a material  adverse  affect on our Company's  revenues and
profitability  opportunities.  As part of our strategic growth objectives in the
contract  manufacturing  area,  we are  continuing  our  efforts to broaden  our
customer base and to generate revenues from our own product  development program
to mitigate  the risk of our  economic  dependence  on any one  client.  We also
believe that by utilizing  our  existing or  potential  customers'  distribution
channels  to  distribute  our  own  proprietary  products,  we can  broaden  and
strengthen our relationship with such clients.

Discussion and Analysis Regarding Net Revenues

         Our  revenues  are now derived from  pharmaceutical  manufacturing  and
associated product formulation and development  outsourcing services,  including
product stability,  commercial  scale-up,  and validation and regulatory support
for our  clients'  products.  These  contract  revenues are  dependant  upon our
clients'  maintaining  or  obtaining  regulatory  approval for the sale of their
products in their designated markets.

         Although  we  have  seen  growth  in our  revenues  since  our  reverse
acquisition of Inyx Pharma, our manufacturing capacity utilization and therefore
our contract manufacturing revenues must continue to increase in order for us to
become  profitable,  especially  as we  have  not  yet  commercialized  our  own
proprietary pharmaceutical products.

         For the three months ended March 31, 2004,  we  experienced  a delay in
the achievement of our target revenues due to extended  delivery lead times from
one of our main component  suppliers and due to a major customer's  requirements
to obtain  additional  regulatory  approvals  for the sale of their  products in
designated markets.

         We also  continue to work to improve  customer  confidence  at our Inyx
Pharma operation.  Although most of Miza UK's customer base had been retained by
Inyx Pharma,  revenues have not yet been restored to the levels  experienced  by
the  predecessor  company prior to  Administration,  as customer  confidence was
adversely affected by that reorganization process. Clients of Miza UK had either
halted  on-going  production  or  development  projects or did not  initiate new
commercial activities due to product release delays, the lack of components, and
the general business uncertainties associated with the Administration process.

         We have already  restarted a number of such client  projects,  but even
with the  return of such  clients,  it has taken  time to  start-up  a number of
manufacturing  projects  due  to  the  required  regulatory  approvals  and  the
production commissioning and validation processes involved in the pharmaceutical
manufacturing  industry.  We believe  that as we continue  to meet our  clients'
product  development,  commercialization  and  manufacturing  requirements,  and
invest to  continually  improve our  production  facilities'  manufacturing  and
quality  systems,  we can  restore  customer  confidence  and to try to  restore
previously experienced revenue levels.



                                       19
<PAGE>

         Additionally,  we have been actively marketing to our customer base and
expect that the manufacturing  capacity utilization at our Inyx Pharma operation
will  continue to increase as new customer  contracts  and  purchase  orders are
obtained and we begin to manufacture and sell our own proprietary products.

         For example,  our  chlorofluorocarbon  (CFC) Metered Dose Inhaler (MDI)
production  line is  currently  operating  at less  than  two  percent  capacity
utilization.   As  we  continue  to  develop  and  exploit  greater   commercial
opportunities in the United States and Latin American  markets,  where CFC-based
respiratory  inhalers are still utilized,  we expect to increase the utilization
of this production line for our own proprietary products.

         Furthermore,  we expect that our  expertise in  converting  from CFC to
CFC-free    aerosol    pharmaceuticals,    particularly    the   production   of
hydrolfuoroalkane  (HFA)  non-ozone-depleting  aerosol pharmaceutical  products,
should generate  increasing  business as the Montreal  Protocol  continues to be
implemented around the world. We are currently assisting a number of our clients
with the  transition to non-CFC based  respiratory  inhalers and have  commenced
manufacturing  such inhalers at our Inyx Pharma production  facility.  We expect
revenue  levels to  gradually  increase in this area as our clients  continue to
receive  regulatory  approvals for their  replacement  products over the next 24
months.

         We also  believe  that  with  our  significant  expertise  and  product
development  and   manufacturing   capabilities   in  the  hydrocarbon   aerosol
pharmaceutical manufacturing sector for dermatological and topical applications,
we will  continue  to see  further  revenue  growth in this sector as the use of
non-CFC based pharmaceutical aerosol technology continues to grow.

         As  we   continue  to  evolve   into  a  fully   integrated   specialty
pharmaceutical  company, we believe that our revenues can grow not only from our
contract  manufacturing and development services,  but also from the sale of our
own proprietary  pharmaceutical  products,  which may also  potentially  provide
royalty and licensing fees from potential product distributors or licensees.  We
expect that our first proprietary product will be ready for commercial marketing
at the end of 2004 or early 2005. We also expect to start  recognizing  revenues
from our manufacturing consulting services later this year.

COST OF SALES

         Cost of sales  for the three  months  ended  March  31,  2004 were $3.9
million  or 86% of net  revenues  as  compared  to  $2.3  million  or 83% of net
revenues for the three months ended March 31, 2003.

         For the pro  forma  three  months  ended  March 31,  2003,  the cost of
product sales amounted to approximately  $2.3 million or 78% of net revenues and
the Biopharma  Division's cost of goods sold for that period were  approximately
$393,000.

Discussion and Analysis Regarding the Cost of Sales

         Our costs of sales are associated  with  manufacturing  and development
revenues,  and include  materials,  labor,  factory overheads and other internal
costs including  purchasing and customer  service costs, and quality control and
quality assurance regulatory support.

         The cost of goods sold as a  percentage  of  revenues  has been high as
compared  to our  level of  revenues,  in the  comparative  periods,  due to the
following two main factors:

         (1) For the majority of the three  months  ended March 31,  2003,  Inyx
Pharma's  predecessor  company,  Miza  UK,  had  been  in  Administration  which
adversely  affected  the overall  sales  levels and reduced  operations  from an
average  of  50%  manufacturing  capacity  utilization  to  an  average  of  25%
manufacturing  capacity  utilization.  This  lower  capacity  utilization  level


                                       20
<PAGE>

significantly reduced fixed overhead cost absorption and concomitantly increased
the cost of sales because factory overheads  contribute to our cost of sales. We
expect our manufacturing  cost of sales to be reduced as more customer contracts
and purchase  orders are initiated,  thereby  increasing the  utilization of our
manufacturing capacity.

         (2) In  addition,  the phasing  out of the  CFC-based  MDI  respiratory
product  line  for the  European  market  has  gradually  reduced  manufacturing
capacity  utilization  and  therefore,  reduced  overhead  absorption  rates and
increased  our  cost of  sales  in the  manufacturing  area.  Additionally,  CFC
respiratory  inhaler products are approximately 20% lower in material costs than
their  non-CFC  equivalents.  As we are now  focused on  phasing in the  non-CFC
version of these products,  primarily  HFA-based  respiratory  MDIs, our cost of
goods sold have marginally  increased as a result of the increased production of
such inhalers for our customers.

Research and Development Costs

         Research  and  development  costs for the three  months ended March 31,
2004  were  approximately  $290,000  or  approximately  6% of net  revenues.  In
comparison, we did not incur research and development costs for the three months
ended March 31, 2003.

         As part of our  strategy  to  evolve  into a  specialty  pharmaceutical
company with its own proprietary products, we have started to incur research and
development costs as part of our cost of sales. These costs include intellectual
property  development  costs,  salaries for required  technical  staff,  fees to
consultants, and costs associated with the use of external laboratory facilities
as may be required. We believe that even though product research and development
costs may increase our cost of sales in the short term, in the long term,  these
costs would be offset by the higher  profit  margins  due to pricing  parameters
associated with the direct distribution of pharmaceutical  products, as compared
to the selling prices derived from contract manufacturing services.

         We are  focusing  our  research  and  development  efforts  on oral and
pulmonary  drug  delivery  devices and  methods,  and generic  prescription  and
over-the-counter aerosol pharmaceutical products for respiratory, dermatological
and topical,  and  cardiovascular  applications.  These products are expected to
consist of non-CFC  respiratory  inhalants,  non-CFC  propelled  oral sprays for
cardiovascular   ailments,   wound   irrigation   and  cleansing   sprays,   and
anti-inflammatory nasal pumps.

         We believe that we can also enhance our  competitive  position  through
the acquisition of regulatory-approved pharmaceutical products and drug delivery
devices  for  respiratory,   dermatological,  topical  and  cardiovascular  drug
delivery  applications or such products in development,  including those through
the  acquisition of other  pharmaceutical  companies.  We plan to distribute our
proprietary  products  through our own  customers'  distribution  channels or in
collaboration with strategic partners.

         At this time,  we have not  commercialized  any of our own  proprietary
products  and we do not  have  any  distribution  agreements  for  our  products
finalized.

GROSS PROFIT

         For the three  months ended March 31,  2004,  gross profit  amounted to
approximately  $330,000 or  approximately  7% of net revenues,  as compared to a
gross profit of approximately $461,000 or approximately 17% of net revenues, for
the three months ended March 31, 2003.

         For the pro forma three months  ended March 31, 2003,  the gross profit
was approximately $520,000, or approximately 22% of net revenues.



                                       21
<PAGE>

Discussion and Analysis Regarding Gross Profit

         We have now commenced  research and  development  activities to develop
our own proprietary  pharmaceutical  products. As we have not yet commercialized
or sold any products, our gross profit as a percentage of revenues has decreased
in  comparison  to  the  previous  year  when  we did  not  incur  research  and
development  costs. We expect that our gross profit margins and our gross profit
as a percentage of our revenues will improve once we have commercialized planned
proprietary products such as topical, oral, nasal and pulmonary pharmaceuticals,
which  traditionally  provide greater profit margins at the  distribution  level
than that of manufacturing services.

         Additionally, we are anticipating improved gross profits as we increase
the  utilization  of our  manufacturing  capacity.  As a result of lower factory
overhead  absorption,  the gross profit  related to our  contract  manufacturing
services  has been less than  what  would be  expected  if we were  running  our
manufacturing  facilities at higher operating levels. We expect the gross profit
to significantly  improve as we commence a number of new manufacturing  projects
during the next twelve months.

         We also  believe  that  our  gross  profits  will be  improved  as more
development  support  service  contracts,  associated  with these  manufacturing
projects,  are initiated.  Historically,  our product  research and  development
contract services have had higher gross margins than our contract  manufacturing
services,  because we only have to account for our own labor support costs while
charging out such  professional  services we provide to our  customers at agreed
higher rates. We expect that our manufacturing  consulting services,  planned to
commence in 2004,  should also offer greater  profit margins than those provided
by contract manufacturing services.

OPERATING EXPENSES

         Operating expenses,  consisting of general and administrative,  selling
and  depreciation  and  amortization  expenses  amounted to  approximately  $2.4
million or approximately  53% of total net revenues,  for the three months ended
March 31, 2004.  In  comparison,  operating  expenses for the three months ended
March 31, 2003 amounted to approximately  $850,000 or  approximately  31% of net
revenues.

         For the pro forma three months ended March 31, 2003, operating expenses
amounted  to  $820,000  as there was only  approximately  $30,000 of general and
administrative expenses for the Biopharma Division during that period.

         Operating  expenses  have  increased  between the  comparative  periods
primarily due to an increase in general and administrative  expenses as a result
of our growing business operations.


General and Administrative Expenses

         For the three months ended March 31, 2004,  general and  administrative
expenses  were $2.1  million or 47% of net  revenues  as compared to general and
administrative  expenses of $570,000 or 21% of net revenues for the three months
ended March 31, 2003.

         Our  General  and  Administrative  expenses  include  salaries  at  the
corporate and subsidiary levels,  consulting fees including legal and accounting
costs, insurance,  business and corporate development costs including directors'
fees, investor relations,  travel and communication expenses, and other business
costs such as rent and maintenance.

         The  increase  in our  general  and  administrative  expenses  for  the
respective comparative periods is primarily attributable to an increase in costs
related to a larger enhanced business  operation with higher  infrastructure and
insurance  costs,  an expanded  management  team and new  corporate  development
costs.  Additionally,  for the three months  ended March 31,  2004,  we incurred
expenses relating to the start-up of our manufacturing consulting business. Such
expenses  were  primarily  related  to  traveling  expenses,  and fees and costs
associated with the use of outside consultants and facilities.



                                       22
<PAGE>

         For the three  months ended March 31,  2004,  salaries  and  associated
benefit costs amounted to approximately $860,000 or approximately 19% of our net
revenues as compared to $260,000 or  approximately  10% of net  revenues for the
three  months  ended March 31,  2003.  With a corporate  infrastructure  and two
operating  subsidiaries,  our Company now has 130 personnel and is evolving into
an integrated pharmaceutical company. During the comparative period in 2003, our
predecessor  company was only operating as a pharmaceutical  manufacturing plant
with associated laboratory facilities and, therefore, had lower staff costs as a
percentage of net revenues.

         Other  expenses   contributing  to  an  increase  in  our  general  and
administrative  expenses for the three  months ended March 31, 2004  amounted to
approximately  $1.26 million or approximately  28% of net revenues were and were
comprised  of  insurance  costs  of  approximately  $215,000,   consulting  fees
including legal and accounting  costs of approximately  $325,000,  corporate and
business  development  costs  of  approximately  $515,000,  and  other  business
overhead costs including rent of approximately $200,000. In comparison,  for the
three months ended March 31, 2003, general and administrative  costs,  exclusive
of salaries and associated benefit costs, amounted to approximately  $310,000 or
approximately 11% of net revenues.

         As we  continue  to  implement  our  corporate  development  and growth
strategy,  we expect to incur some  additional  administrative  costs due to the
addition of senior sales and  marketing  executives to our  management  team. We
believe that as we grow our business and begin to introduce our own  proprietary
products,  which we believe  will have higher  profit  margins than the contract
development and manufacturing fees that we presently receive from our customers,
we can offset these administrative incremental costs on a longer term basis.

Selling Expenses

         For the three  months  ended  March 31,  2004,  selling  expenses  were
approximately $85,000 or approximately 2% of net revenues as compared to selling
expenses of approximately  $50,000 or also  approximately 2% of net revenues for
the three months ended March 31, 2003.

         Selling  expenses  consist  primarily  of  salaries,   commissions  and
marketing costs  associated with the commercial,  and sales and marketing arm of
our business. Although we perform some sales and marketing functions,  presently
such activities are primarily  focused on expanding our  pharmaceutical  aerosol
manufacturing business with existing or potential clients.

         Although we continue to expand our own proprietary  product development
programs,  we have not yet  commercialized  or marketed our own products or drug
delivery applications.  Therefore, our selling expenses have remained relatively
consistent over the comparative  periods. As we continue to ramp-up our business
development  and  commercial  activities,  we expect  our  selling  expenses  to
increase concomitantly with expected revenue expansion.  Our selling expenses as
a percentage of our revenues will also increase as we are planning to add senior
sales and marketing  executives to assist in our business  expansion,  including
intensifying our marketing activities to both existing and potential customers.

         Once we commence marketing of our own proprietary products, we may also
need to build or contract  our own sales  force.  We believe  that we will incur
substantial  additional  selling  expenses  once we  undertake  these  types  of
commercial  activities.  Initially,  however, until we can adequately afford the
cost of  building  or  contracting  our own sales  force,  we will depend on our
customers'  distribution  channels or strategic  partners to market and sell the
pharmaceutical products that we are presently developing or planning to develop.



                                       23
<PAGE>

Depreciation and Amortization Expenses

         For  the  three  months  ended  March  31,   2004,   depreciation   and
amortization  expenses were  approximately  $230,000 or  approximately 5% of net
revenues as compared to depreciation and amortization  expenses of approximately
$230,000 or  approximately  8% of net  revenues for the three months ended March
31, 2003.

         For the  three  months  ended  March 31,  2004,  our  depreciation  and
amortization  costs  included  amortization  of  financing  costs  amounting  to
approximately  $80,000. For the comparative period, the predecessor company also
had a higher value for property plant, and equipment.

         The value of our property and equipment is stated at cost. Depreciation
is computed using the  straight-line  method based on the estimated useful lives
of the  assets,  which  range  from 25 years for  buildings  and 3-10  years for
equipment.

OPERATING LOSS BEFORE OTHER EXPENSES

         For the three  months  ended March 31,  2004,  losses  from  operations
before other expenses amounted to approximately  $2.1 million compared to a loss
from operations  before other expenses of  approximately  $390,000 for the three
months ended March 31, 2003.

         For the comparative  periods,  pro forma loss from operations increased
primarily  due to the  increased  amount of  expenditures  required  to grow our
company and evolve into an integrated pharmaceutical company.

         We believe that we can offset these  additional  costs and expenses and
achieve  profitability  as more  customer  contracts  and  purchase  orders  are
initiated  or  renewed,  through  the  increase  of our  manufacturing  capacity
utilization,  the  increased  business  that we  expect to be  derived  from our
expertise  in  non-CFC  aerosol  pharmaceuticals,   and  the  marketing  of  our
proprietary  pharmaceutical  products,  which we expect  will  improve our gross
margins.

OTHER EXPENSES

         Interest  expense  amounted  to  $220,000  or  approximately  5% of net
revenues for the three months ended March 31, 2004, as compared to approximately
$175,000 or  approximately  6% of net  revenues for the three months ended March
31, 2003.

         The interest expense for the three months ended March 31, 2004 includes
interest  accrued and paid to our primary  lender,  Laurus Master Fund, Ltd. and
our  convertible  note  holder,  Stiefel  Laboratories,  Inc.  In March of 2004,
$240,000 of interest was offset by a waiver that we received from Stiefel on the
annual  interest  payment  due to  them  in  consideration  for  future  product
development services.

         The interest  paid for the three months ended March 31, 2003 relates to
the outstanding  indebtedness of Inyx Pharma's  predecessor  company at the time
and is not  indicative  of the interest that we will incur going  forward,  as a
result of new financing arrangements.

INCOME TAX BENEFIT

         For the three  months  ended  March 31,  2004,  the tax  benefit net of
valuation  allowance  is  approximately  $390,000.  As of March  31,  2004,  our
deferred tax asset amounts to approximately $1.7 million.

         We have not made any  provisions  for United States  federal or foreign
taxes that may result  from  future  remittances  of  undistributed  earnings of
foreign  subsidiaries,  because  it is  expected  that  such  earnings  will  be
permanently reinvested in our foreign operations.



                                       24
<PAGE>

NET LOSS/INCOME

         Net loss for the three  months  ended March 31, 2004 was  approximately
$1.9 million as compared with a net loss of approximately $620,000 for the three
months ended March 31, 2003.

         The  increase  on our net loss  for the  comparative  periods  resulted
primarily  from low gross profit  margins as we continue our efforts to increase
the use of our manufacturing capacity, and new research and development costs as
we have now commenced to develop our own proprietary pharmaceutical products, as
well as an increased amount of business and corporate  development  expenditures
required  to grow our  company  and  evolve  into an  integrated  pharmaceutical
company.

         We  believe  that we are  close to  achieving  profitability  as we are
continuing  to obtain new  contracts  and purchase  orders from existing and new
customers, as well as to commencing our first consulting contract in 2004.

         We also believe that we can improve  gross profit  margins  through the
addition of our own pharmaceutical product lines, which may offer greater profit
margins than those provided by contract manufacturing  services.  Although we do
not  currently  derive any  revenues  from the sale of our own  products,  it is
anticipated  that our first  proprietary  product should be ready for commercial
marketing by the end of 2004 or early 2005.

         We believe that our strategic new business initiatives will allow us to
earn  greater  revenues,  improve  our gross  margins and offset a number of our
expenditures, thereby significantly improving our profitability potential.

LIQUIDITY AND CAPITAL RESOURCES

General

         We  are  financing  our  operations  primarily  through  revenues  from
contract manufacturing and product development  contracts,  stockholders' equity
contributions, credit facilities, and capital lease financing.

         At March 31,  2004 we had  approximately  $15  million  in  contractual
obligations that are due from 2004 to 2013, although  approximately $1.6 million
of these contractual  obligations are for rental payments under a ten-year lease
that was subsequently  acquired by a related entity.  The remaining  obligations
now  amounting  to  approximately  $13.4  million  over the period  2004 to 2013
include both  short-term and long-term  debt interest and principal  repayments,
and amounts owed for operating leases.

         Additionally,  we continue to incur operating  losses since our reverse
acquisition  of Inyx Pharma on April 28, 2003.  For the three months ended March
31, 2004, such losses amounted to  approximately  $1.9 million and resulted from
low gross  profit  margins  as a result of the lower  than  required  use of our
manufacturing  capacity,  research  and  development  costs as we  continue  the
development of our own proprietary pharmaceutical products, and costs associated
with  our  efforts  to  grow  our   Company   and  evolve  into  an   integrated
pharmaceutical company.

         In time,  we believe  that we can achieve  profitability  once we fully
integrate  and  develop  our  Company  in  accordance  with our  noted  business
strategies.  These strategies  include enhancing our sales and marketing efforts
to  increase  the  number of  customer  purchase  orders and  contracts  for our
contract  development and  manufacturing  services,  establishing new sources of
revenue by providing  pharmaceutical  manufacturing  consulting  services to the
industry,  and  the  commercialization  and  marketing  of our  own  proprietary
pharmaceutical  products.  We  expect  that  the  successful  launch  of our own
products will provide greater  operating margins and improve our performance and
overall profitability.



                                       25
<PAGE>

         Until that time, we will  continue to depend on our credit  facilities,
and  placements  of equity  and debt  securities  to assist us with our  working
capital   requirements,   capital  expenditure  plans  and  proprietary  product
development initiatives.

Capital Resources

         In the three months ended March 31, 2004, we completed  new  financings
totaling  approximately  $3.0 million  through the issuance of convertible  debt
securities.

         On February 27, 2004, we closed a transaction  with our primary lender,
Laurus Master Fund, Ltd. ("Laurus Funds"), to obtain an additional  financing of
$2.0  million  as an  amendment  to the $3.5  million  credit  facility  that we
previously  entered  with them on December  30,  2003.  That Laurus $3.5 million
credit  facility  consists  of two  promissory  notes,  a $1.0  million  Secured
Convertible  Minimum  Borrowing Note, and a $2.5 million Secured Revolving Note.
As a  result  of the  additional  Laurus  financing,  the $1.0  million  Secured
Convertible Minimum Borrowing was increased by $1.0 million and the $2.5 million
principal amount Secured  Revolving Note of the credit facility was increased by
$1.0  million.  Both  Notes were  further  amended to  decrease  the  applicable
conversion rate from $1.47 to $1.00. As additional  consideration  for the loan,
we issued to Laurus a  five-year  Common  Stock  Purchase  Warrant  to  purchase
330,000 shares of common stock at exercise  prices of $1.25 for 110,000  shares,
$1.50 for 110,000 shares and $1.75 for 110,000 shares.

         On March 30, 2004, we also obtained an additional  $1.0 million advance
from Laurus Funds under the Secured Revolving Credit Note, and issued additional
warrants to purchase  165,000 shares of common stock at exercise prices of $1.25
for 55,000 shares, $1.50 for 55,000 shares and $1.75 for 55,000 shares.

         Subject to certain  limitations,  these Laurus Funds credit  facilities
permit payments to be made in our common stock.  We therefore  expect to amend a
registration  statement  that is not yet  effective,  to register an  additional
3,000,000  shares  issued  upon  conversion  of the  Notes  or in  lieu  of Note
payments,  and the 495,000 warrants that we have issued to Laurus in association
with these financings.

         The credit facilities and convertible debt security placements and cash
generated  from  operations  during the three  months  ended March 31, 2004 were
sufficient to fund our working capital requirements for that period. However, on
both a short-term  and  long-term  basis,  we will be required to raise  capital
through a combination of additional  borrowings,  and the issuance of additional
debt and equity  securities to implement our business and growth strategies as a
specialty pharmaceutical company.

         On a  short-term  basis,  in  2004,  we  believe  that we will  require
approximately  $12.5  million in total  additional  funding  consisting  of $2.5
million to meet our debt and interest repayment  obligations,  and approximately
$10  million  to fund our  working  capital,  capital  expenditure  and  product
development  spending  requirements.  On a longer term basis, over 2005 and 2006
and 2007,  we  believe  that in each  respective  year we will  require  further
funding in order to continue to meet our  contractual  obligations and implement
our capital expenditure and product development and commercialization plans.

         Additionally,  we believe that we can enhance our competitive  position
through the acquisition of regulatory-approved  pharmaceutical products and drug
delivery  devices for  respiratory,  dermatological  and topical  drug  delivery
applications  or such  products  in  development,  including  those  through the
acquisition of other pharmaceutical  companies although no definitive agreements
are currently in effect to make any such  acquisition.  We are actively pursuing
acquisitions that may require substantial  capital resources.  In the event that
we make a significant future acquisition or change our capital structure, we may
be required to raise funds  through  additional  borrowings  or the  issuance of
additional debt or equity securities.


                                       26
<PAGE>

Analysis of Cash Flows

         At March 31, 2004, we had cash of approximately $750,000.

         The net cash used in  operating  activities  for the three months ended
March 31, 2004  amounted to  approximately  $3.2  million.  Our net cash used in
operations  was primarily the result of a $1.9 million net loss from  continuing
operations of the business,  adjusted by non-cash charges including depreciation
of and  amortization  of  approximately  $230,000,  a reserve  for bad debts and
obsolete  inventory  amounting to  approximately  $450,000,  and net  securities
issuance costs of approximately $430,000.  These non-cash charges were offset by
a  deferred  income tax asset of  approximately  $390,000,  consisting  of a net
operating loss carried forward.  Working capital changes reducing cash flow from
operations were due to an increase in deferred  financing costs of approximately
$480,000, increases to our inventory amounting to approximately $210,000, and an
increase  to  our  prepaid  deposits  and  other  current  assets  amounting  to
approximately  $1.3 million,  resulting  from  increasing new sales and business
development  activities.  Working  capital  changes  increasing  cash  flow from
operations  were  due  primarily  to  a  decrease  of  accounts   receivable  of
approximately  $100,000, an increase in accounts payable and accrued liabilities
of   approximately   $135,000  and  a  decrease  in  deferred  revenue  totaling
approximately $190,000.

         Investing  activities for the three months ended March 31, 2004 reduced
cash flow by  approximately  $60,000  primarily due to the acquisition of office
equipment and computers.

         Financing  activities,  due  to  net  advances  from  the  issuance  of
additional  debt  securities to Laurus  Funds,  contributed  approximately  $3.2
million to our cash flow.

         As an emerging specialty  pharmaceutical  company, we are involved in a
number of business  development  projects  including  research  and  development
activities  that require the use of capital  resources over extended  periods of
time. From time to time,  these  activities may also include the use of external
resources  that require  prepayment or cash  deposits for supplies,  products or
services that we require. As we intensify the development of our own proprietary
products, our capital requirements may increase accordingly.  The profit margins
on our  proprietary  products and consulting  services are expected to be higher
than  our  contract  manufacturing  services,  although  the  time  line for the
commencement of revenues and earnings from these additional  business activities
may be longer than that of our contract manufacturing operation.

         For the  three  months  ended  March  31,  2004,  our  existing  credit
facilities and capital  resources  were  sufficient to fund the cash required to
operate our business. However, on both a short-term and long-term basis, we will
be required to continually  raise capital through  additional  borrowings or the
issuance of  additional  debt or equity  securities  in order to  implement  our
business and growth strategies,  which may also include significant  business or
corporate acquisitions or changes to our capital structure.

Subsequent Events and Expectations

         On April 14, 2004, Inyx Realty,  Inc.,  which we established  solely to
operate a corporate office lease in Miami Florida,  was acquired by First Jemini
Trust, a discretionary family trust in which our Chairman/CEO and his spouse are
beneficiaries,  thus  terminating  all of our Company's  obligations  under that
lease.

         On April 26, 2004, we announced  that we acquired a group of parenteral
pharmaceutical products enabling the Company to enter the hospital supply market
in the United Kingdom.  These product licenses give us the exclusive  production
and  distribution  rights  in the UK for a group of  hospital  products  used in
infusion, irrigation and injection applications. The products were acquired from
a pharmaceutical company that was placed in UK Administration in 2002.



                                       27
<PAGE>

         On May 7, 2004, we terminated our investment banking  relationship with
Duncan Capital,  LLC ("Duncan").  As a termination  fee, we agreed to pay Duncan
$120,000, plus eight percent interest on the outstanding principal,  over twelve
months commencing May 15, 2004.

         On May 7,  2004,  we  entered  into an Offset  Agreement  with  Stiefel
Laboratories,  Inc. ("Stiefel"),  where we received from Stiefel a waiver on our
annual interest  payment to them under their  four-year 6% unsecured  promissory
note. An interest  payment  amounting to  approximately  $275,000 for the period
March 6, 2003 to March 5, 2004, due to Stiefel,  was waived in  consideration of
future contract product development services required by Stiefel.

         On May 11, 2004, we announced that a new outside  director and chair of
our Audit  Committee,  Mr. Joe Rotmil,  would  succeed  Mr.  Orestes  Lugo,  who
resigned from those capacities in order to pursue other business activities. Mr.
Rotmil was issued  200,000  Company Stock Options at an exercise price of $1.10.
Mr. Lugo had 350,000 stock options that were cancelled and in exchange we issued
Mr. Lugo a three-year  Common Purchase Warrant to purchase 100,000 shares of our
common stock at an exercise price of $1.20.

         In 2004,  we will  continue to focus on  strengthening  and growing our
pharmaceutical  aerosol  contract  manufacturing  business  in  order  to  reach
profitability.  Additionally,  we plan to continue  the  development  of our own
proprietary pharmaceutical products for respiratory, dermatological, topical and
cardiovascular drug delivery  applications,  to be marketed and sold through our
customers'  distribution  channels or with strategic partners.  Planned products
include metered dose inhalers,  nasal pumps, topical aerosols, wound care sprays
and oral  sprays for  cardiovascular  disease.  We are  primarily  focusing  our
efforts on generic pharmaceutical  products and innovative drug delivery systems
that allow line extensions of established  products,  or those delivery  systems
that overcome  present product and propellant  incompatibility  and consumer use
issues in the pharmaceutical aerosol sector.

         During  this  year,  subject  to  receiving  all  necessary  regulatory
approvals, we will fully implement our manufacturing consulting agreement with a
developing  nation  under the United  Nations  Development  Programme - Montreal
Protocol  for the UNDP,  and to  continue  to  explore  pharmaceutical  business
acquisitions  or  the  acquisition  of  pharmaceutical  products,   intellectual
properties or drug delivery devices.

Item 3.  Controls and Procedures

a)   Within the 90-day  period prior to the date of this report,  we carried out
     an evaluation,  under the  supervision  and with the  participation  of our
     management,  including  the Chief  Executive  Officer  and Chief  Financial
     Officer, of the effectiveness of the design and operation of our disclosure
     controls and procedures  pursuant to Rule 13a-14 of the Securities Exchange
     Act of 1934 (the "Exchange  Act").  Based upon that  evaluation,  the Chief
     Executive officer and Chief Financial Officer concluded that our disclosure
     controls and procedures  are effective in timely  alerting them to material
     information relating to the Company required to be included in our Exchange
     Act filings.  The two  Executive  Officers  responsible  for the  financial
     reporting and  disclosure are in direct control of the books and records of
     the Company and are involved  first-hand in the decision making process for
     material transactions.

b)   There have been no significant changes in our internal controls or in other
     factors,  which could significantly  affect internal controls subsequent to
     the date we carried out our evaluation.



                                       28
<PAGE>

PART II-- OTHER INFORMATION

Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities

         The following  equity  securities were issued by Registrant  during the
first quarter of 2004.

         On February 27, 2004, in  consideration of a $2 million increase to our
$3.5 million  credit  facility  with Laurus  Funds,  we issued to Laurus Funds a
five-year  Common Stock  Purchase  Warrant to purchase  330,000 shares of common
stock at exercise prices of $1.25 for 110,000  shares,  $1.50 for 110,000 shares
and $1.75 for 110,000 shares.

         On March 30, 2004,  in  consideration  of a $1 million  increase to our
Secured  Revolving  Credit Note facility with Laurus Funds,  we issued to Laurus
Funds an additional  five-year Common Stock Purchase Warrant to purchase 165,000
shares of common stock at exercise prices of $1.25 for 55,000 shares,  $1.50 for
55,000 shares and $1.75 for 55,000 shares.

         On January 15,  2004,  pursuant  to an exercise of 200,000  options the
Company issued 200,000 shares of common stock at $1.10 per share issued.

         On January 16,  2004,  pursuant  to an  exercise of 65,000  options the
Company issued 65,000 shares of common stock at $1.20 per share issued.

Item 3.  Defaults Upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Information

         On February 3, 2004,  we announced  that our wholly  owned  subsidiary,
Inyx Canada Inc., had been selected by the United Nations Development  Programme
(UNDP) to assist a  candidate  country  meet the  requirements  of the  Montreal
Protocol  to phase out the  consumption  of  ozone-depleting  chlorofluorocarbon
("CFC")  propellants in metered dose  inhalers,  used in the treatment of asthma
and other respiratory  conditions.  The initial contract under this program will
be managed by Inyx Canada Inc., and our wholly owned United Kingdom  subsidiary,
Inyx Pharma Limited, will be providing technology transition consulting services
to the candidate  country, a Latin American country.  These consulting  services
include the installation of manufacturing  facilities,  equipment,  and systems,
the  procurement  of supplies,  and the  training of  personnel  to  manufacture
CFC-free  or  Hydrofluoroalkane  ("HFA")  propelled  aerosol  based  respiratory
inhalers.  As our parent  company is a U.S.  corporation,  and  because  certain
involved members of our management team are U.S.  residents,  to perform on this
contract we require United States government business  authorizations and export
permits to do business in the  candidate  developing  country.  Due to political
events or changes to U.S.  government laws, the U.S. government may not continue
to  provide  us with the  necessary  permits  and  authorizations  we require to
perform on this contract.  The failure to receive or sustain such authorizations
or permits may have a material adverse affect on any costs, expenses, or prepaid
fees and  deposits  that we have  incurred  or will  incur in  relation  to this
contract, and our ability to continue to provide our services to that developing
country and subsequently receive revenues from performing on that UNDP contract.
Additionally,  although  we will be paid  directly  by the UNDP in a  series  of
progress  payments  to cover our costs  and fees over the  two-year  term of the
project,  we are subject to the risks of doing business in a developing country,
including dealing with import or export licensing requirements;  difficulties in
enforcing  aspects of our contracts  with the UNDP and that  candidate  country;
difficulties  in  protecting   intellectual  property;   unexpected  changes  in
regulatory requirements; legal uncertainty regarding liability, tax, tariffs and
other trade  barriers;  foreign  exchange  controls  and other  currency  risks;
inflation;  challenges  to  credit  and  collections;  expropriation;  and local
government instability, war, riots, insurrections and other political events.



                                       29
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits

         10.4.5   Employment Agreement with Jay Green

         31.1     Certification  by CEO  pursuant  to 18  USC  Section  1350  as
                  adopted by

                  Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2     Certification  by CFO  pursuant  to 18  USC  Section  1350  as
                  adopted by

                  Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1     Certification  by CEO  pursuant  to 18  USC  Section  1350  as
                  adopted by

                  Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2     Certification  by CFO  pursuant  to 18  USC  Section  1350  as
                  adopted by

                  Section 906 of the Sarbanes-Oxley Act of 2002.

         (b)      Reports on Form 8-K.

                  Form 8-K filed with the SEC on January 6, 2004

                  Form 8-K filed with the SEC on January 26, 2004

                  Form 8-K/A filed with the SEC on March 15, 2004



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

         Date:    May 17, 2004

                                                     INYX, INC.


                                                     By: /s/ Rima Goldshmidt
                                                        ------------------------
                                                        Rima Goldshmidt,
                                                        Vice President Finance

















                                       30